EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819860
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Origin Energy Power applied for a TCO in respect of certain electric resistance welded pipe 9.5 mm on 17 July 2008.
Instrument
TCO No 0819860 was made on 10 October 2008. It declares that those certain electric resistance welded pipe 9.5 mm are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0819860 is taken to have come into force on 17 July 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted by the Parliament of Australia to regulate the importation and exportation of goods and to provide for the collection of customs duty and other charges. The Tariff Concession Instrument No. 0819860, introduced in 2008, addresses the specific problem of allowing for tariff concessions on certain imported goods when no substitutable goods are produced in Australia. This instrument allows for the application of a lower rate of customs duty on specified goods, enhancing trade efficiency and potentially benefiting importers by reducing costs and potentially allowing for duty refunds on goods imported since the effective date of the concession. The instrument was made under the authority of the Chief Executive Officer of Customs, following an application by Origin Energy Power for tariff concessions on certain electric resistance welded pipe 9.5 mm, and it came into force on the date the application was lodged, 17 July 2008. The policy objective of this measure is to facilitate smoother trade practices by reducing the duty burden on certain imported goods where local production alternatives do not exist.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for making Tariff Concession Orders (TCOs) which can lead to a reduced rate of customs duty on certain goods. An individual or entity may apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from eligibility. The CEO will assess the application against the criteria outlined in sections 269C, 269B, and 269D of the Act, which involve determining whether substitutable goods are produced in Australia in the ordinary course of business. If the CEO determines that no such substitutable goods exist, a TCO can be issued, applying a lower duty rate to the specified goods. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties, although in this case, no submissions were received. The TCO does not retroactively affect the rights of any person, ensuring that it only benefits those importing the goods from the date the TCO is deemed to have come into effect.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically concerning Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business, the CEO must make a written order declaring that the goods are subject to a lower rate of customs duty as specified in the TCO.
The obligations imposed by the Act on the parties or entities it governs include the requirement for applicants to ensure that their applications meet the core criteria, specifically that no substitutable goods were produced in Australia. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid. The CEO must also ensure that the application does not relate to goods specified in section 269SJ, which are ineligible for a TCO. Furthermore, the CEO must adhere to the timelines set out in the Act, such as making the TCO within a specified period after the application is lodged.
Offences, penalties, or consequences for breach of the Act are not explicitly detailed in the provided explanatory statement. However, the Act generally provides for both civil and criminal penalties for breaches of customs regulations. For instance, section 199 of the Act outlines that a person who contravenes a provision of the Act is liable to a penalty of up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, depending on the severity and intent of the breach. Additionally, criminal prosecution may result in imprisonment for offences under the Act. Although the specific penalties for breaching a TCO provision are not detailed in the explanatory statement, they would likely align with the general penalties outlined in the Act for customs-related offences.